3 oil companies are suing the state, saying a reinterpretation of Alaska tax law cost them millions
Anchorage Daily News, Nathaniel Herz, June 13, 2018
Three companies in Alaska’s oil and gas industry have sued Gov. Bill Walker’s administration over what they assert is a change in tax policy that could cost companies tens of millions of dollars. Two of the plaintiffs are big oil producers, ExxonMobil and Hilcorp. The third is a company that searches for oil, SAExploration, which says the policy has reduced the value of tax credits it’s earned. Both sides have a big stake in the outcome, with the oil companies protecting their revenues and the state defending its petroleum-based income. Alaska’s oil revenue is expected to be $1.8 billion this year, enough to cover almost half of the $4.4 billion the state spends on its yearly operating budget.
Our Take: Communication is key. Having open dialog with both parties could have prevented either from being in this situation. Click here to read the 19-page complaint.
Fort Knox expansion to extend mine life to 2030
Fairbanks Daily News-Miner, Rod Boyce, June 12, 2018
Kinross Gold Corp. announced Tuesday that it will proceed with an expansion of its Fort Knox gold mine northeast of Fairbanks, extending the mine’s life to 2030. The company expects the expansion will produce 1.5 million gold equivalent ounces, a term that includes byproducts mined along with the gold. Kinross possessed mineral rights to 709 acres immediately west of the Fort Knox in December but could not exercise the rights until the land came into state ownership.
Our Take: This is great news for Alaska. Developing our resources responsibly is one of the things we do best. This is also great news for anyone (which is everyone) who uses products produced from mining. Click here to view some of the everyday products in your life thanks to mining.
IGU approves final purchase of Pentex
Fairbanks Daily News-Miner, Robin Wood, June 12, 2018
Within the next two days, Interior Gas Utility’s general manager will fly to Anchorage and sign the final paperwork approving the roughly $60 million purchase of Pentex Natural Gas Company. The Alaska Industrial Development and Export Authority currently owns Pentex and is providing IGU the loan to purchase the company. IGU’s board of directors voted 4-1 on Tuesday night to give IGU General Manager Jomo Stewart authority to sign the final paperwork.
Our Take: Hopefully this is a step towards more affordable energy for Fairbanks.
From today’s Washington Examiner, Daily on Energy:
SENATE APPROPRIATORS SAY NO TO TRUMP, AGAIN: Senate appropriators reversed Trump-proposed cuts to the EPA and Energy Department budgets on Tuesday to advance a $35.85 billion spending bill.
The Appropriations Committee’s subcommittee on EPA and related agencies rejected many of the fiscal 2019 budget proposals put forth by the president with wide-ranging cuts that neither GOP and Democrats could support.
Up, up, up: The proposed funding level that the subcommittee passed is 26.7 percent higher than what was proposed. The funding represents about a $600 million increase from the funding Congress approved for fiscal 2018.
Trump’s ‘unwarranted decreases’: The bill admonished the “unwarranted decreases proposed in the budget and [makes] investments in our highest priorities, especially infrastructure investment for the land management agencies, Indian country and wastewater and drinking water improvements,” said Sen. Lisa Murkowski, R-Alaska, the chairwoman of the appropriations subcommittee.
Our Take: A $600 million increase from last year’s budget makes us question the need for such a large increase.